We present a new experimental investigation of preference reversal. Although economists and psychologists have suggested a variety of accounts for this phenomenon, the existing data do not adequately discriminate between them. Relative to previous studies, our design offers enhanced control for...

With in-kind transfer self-selection schemes, agents choose between a set level of public provision or buy freely from the private market. Housing, education, and healthcare are often of this form. The optimal design of these schemes is analyzed here. It is shown that when a charge can be levied...

A host of experiments have examined theories of risky choice using "individuals". However, many important economic decisions are taken within multi-adult "households". This paper reports on the first economic experiment designed to test theories of household choice. We use established couples...

This article reports experimental tests of two alternative explanations of how players use focal points to select equilibria in one-shot coordination games. Cognitive hierarchy theory explains coordination as the result of common beliefs about players' pre-reflective inclinations towards the...

There is some evidence that, as individuals participate in repeated markets, "anomalies" tend to disappear. One interpretation is that individuals — particularly marginal traders — are learning to act on underlying preferences which satisfy standard assumptions. An alternative...

Preference reversal is often explained as an information-processing effect, whereby individuals respond differently to valuation problems than to straight choices. Regret theory offers the alternative explanation that individuals act on consistent, but nontransitive, preferences. Regret theory,...